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:: HOME :: CREDIT CARDS :: LONG DISTANCE :: INTERNET SERVICE :: LOANS :: CELL PHONES :: INSURANCE · Main Page · Auto Insurance  Compare Quotes Search by State Tips and Advice· Health Insurance Compare Quotes Tips and Advice· Life Insurance Compare Quotes Tips and Advice Life Ins. Calculator· Home Insurance Compare Quotes Tips and Advice· Business Insurance Compare Quotes Tips and Advice· Other Insurance · Info & Resources :: ONLINE BANKING :: KNOWLEDGE :: MORE |
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Auto Insurance Tips and Advice Center Topic: Auto Insurance Myths See the subtopics menu for truth and fiction about auto insurance. For additional information about auto insurance, see the topic list directly below.
 Myth: Federal Government Determines Insurance RatesDoes the Federal government determine insurance rates? Myth - The federal government sets auto insurance rates by coverage levels. Therefore, there is no reason to compare different insurance companies looking for the lowest price. Fact - The federal government has no bearing or influence on the price of car insurance. State government may provide general guidelines to insurers, but the bottom line is the insurance companies determine the rates. It is very beneficial to get quotes from several different auto insurance companies an compare rates and coverage limits. ^ Back to top Myth: I Only Need The Minimum Amount Of Mandated InsuranceDo I need more than the state minimum of car insurance? Myth - I will have enough car insurance by getting the minimum amount of coverage as mandated by the state. Fact - The minimum requirements will not protect you from lawsuits resulting from accidents that are your fault. If you cause more property damage or extensive injuries than your policy covers, you can be sued and determined liable to pay the bills. It's best to have as much auto insurance coverage as you can reasonably afford. ^ Back to top Myth: Low-Deductible Policies Are The Best Money SaversWill a low-deductible policy save me the most money? Myth - Smaller deductibles will save you money because you won't have to pay out a large amount if you get in an auto accident. Fact - Small deductible policies have higher premiums. Therefore, you will probably save more money in the long run by having a bigger deductible (and lower premiums). Oftentimes, it can actually make financial sense to keep your premiums as low as possible by having a higher deductible policy. ^ Back to top Myth: Males Under 25 Pay Astronomical Car Insurance RatesWill my car insurance rates drop when I turn 25? Myth - Males under 25-years-old pay the highest car insurance rates. And as soon as a male turns 25, his rates will drop drastically. Fact - Though males under 25 may pay higher auto insurance rates through some insurance carriers, this is not an automatic rule. Basically, those with less driving experience and/or poor driving records pay higher rates, no matter the sex. Teenagers and seniors normally pay higher insurance rates due to the fact they are typically involved with more car accidents. ^ Back to top Myth: My Credit Rating Doesn't MatterDoes my credit rating affect my car insurance rates? Myth - My credit rating doesn't affect my auto insurance rates at all. Fact - It's an auto insurance fact that many insurance carriers do, in fact, check your credit score when determining your auto insurance rates. This is particularly true when you increase your coverage. If you have extremely bad credit, they may determine you are too risky to insure. ^ Back to top Myth: No-Fault InsuranceDoes no-fautlt insurance mean I can never be at fault for an accident? Myth - If I have no-fault insurance that means that I am not at fault for any accident. Fact - This is one of the most common auto insurance myths. No-fault insurance merely means that your insurance company will pay for your damages (up to your limits) regardless of who is at fault for the accident. ^ Back to top Myth: Red Cars Are More Expensive To InsureAre different car colors more expensive to insure? Myth - The color of your car has a direct correlation to your insurance rate. Fact - The color of your vehicle does not affect your car insurance rate in any way. Years ago many people began to believe that red cars (and sometimes even black cars) were automatically more costly to insurance. Though these are typical colors of sports cars, it's not the color that influences the rate. The car's make, model, engine size and year may affect the rate, but not just the color. ^ Back to top Myth: I Don't Need A Business Auto Insurance PolicyDo I need a business auto insurance policy? Myth - My personal auto insurance policy will cover myself and my employees who drive vehicles to conduct business. Fact - You need to notify your auto insurance agent or company that you use your vehicle for business so that they can extend your policy to cover for business use. They may need to underwrite a special business auto insurance policy. Also, if your car is owned by your company rather than yourself, make sure that the company name is listed as the "principal insured" on the policy. ^ Back to top
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